Good morning. By finally acknowledging Google as a legitimate rival in the productivity and collaboration applications market, Microsoft has made it easier for CIOs to use Google’s cloud-based application suite as leverage in contract negotiations.

It’s not an either-or proposition; many organizations that have switched to Google productivity or collaboration tools continue using Microsoft applications as well. Joe AbiDoud, CIO of Canadian mining concern HudBay Minerals, says while the company has moved most employees to Google Docs, it still makes Microsoft Office available to Word and Excel power users. But even a partial switch gives the company the opportunity to, “evaluate and consider whether we need to purchase future bulk licenses of Office,” he tells CIO Journal.

The CIO of a large financial services firm told us that as recently as 2011, Microsoft refused to rise to the bait when he threatened to move the bulk of his licenses to far less expensive Google Apps. Now, as the WSJ’s Shira Ovide reports, he probably would have gotten a call from Microsoft’s “Google Compete” team. Indeed, Manesh Patel, CIO of electronics contract manufacturer Sanmina-SCI, says the companies’ rivalry in the market gives him “flexibility and options” going forward.

XPeerient gives CIOs leverage with service providers. XPeerient, a start-up founded by the former CIO of CXO Media, claims it can help cut IT buying cycles from 19 months to 100 days by matching technology service providers with buyers. The cloud-based marketplace is also a good way to ensure vendors are pricing their products and services appropriately, Energy Plus CIO Hugh Scott tells CIO Journal.

TECHNOLOGY NEWS

Cash register company uses cloud to reach new market. NCR yesterday launched a cloud-based point-of-sale system that lets merchants use their iPhone or iPad to process transactions, and provides them with technology — such as inventory tracking and loyalty marketing — typically available only to larger businesses, reports AllThingsD’s Arik Hesseldahl. NCR says it can price the service at $79 per month, making it affordable for a large number of previously under-served businesses, because the system is cloud-based.

Google project has ISPs on edge. Google is launching an experimental fiber network next week, providing some Kansas City residents with speeds of 1 Gigabit per second. GigaOM’s Stacey Higginbotham believes that the project, several years in the making, is “Google’s answer to the ISP’s continued whining about how much networks cost to operate.” Expect Google to share data on how it managed to drive down the cost of operating a network, she writes.

How Nokia lost the smartphone race. Nokia developed early smartphone prototypes that anticipated features of Apple’s iPhone and iPad, but never produced the gadgets, the Journal’s Anton Troianovski and Sven Grundberg write. Nokia has spent $40 billion on research and development over the past decade—nearly four times what Apple spent in the same period – and it clearly saw where the industry was heading. But its research effort was fragmented by internal rivalries and disconnected from the operations that actually brought phones to market. Instead of producing hit devices or software, the spending binge has left the company with at least two abandoned operating systems and a pile of patents that analysts now say are worth around $6 billion — the bulk of the value of the entire company.

Tech manufacturing moves to Malaysia. Following last year’s earthquake in Japan and flooding in Thailand, global manufacturers such as Intel and Western Digital are looking to Malaysia and elsewhere to broaden their supply chains, the Journal’s James Hookway reports. And the drive to spread risk isn’t necessarily requiring more money, as wages have risen quickly in China and Thailand. Manufacturers may also be able to save money by expanding into countries with lower taxes and logistical costs, according to Gartner’s Stan Aronow.

Hacker claims hit on IT recruiting firm. A hacker is claiming a data breach atITWallStreet.com, a website for job-seeking IT professionals. Computerworld’s Jaikumar Vijayan looks at the data posted by the hacker online and finds thousands of phone call records between candidates and recruiters, as well as salary information and references supplied by candidates. The client list contains Wall Street firms such as Goldman Sachs, Nasdaq and Dow Jones. Andiamo Partners, the recruiting firm that runs the site, did not confirm or deny the attack, pending its own investigation into the breach.

Dropbox investigates spam source. Popular cloud storage service Dropbox is investigating a possible data breach after claims by some users that e-mail accounts created solely to log in to the service are being hit by spam. Ars Technica’s Jon Brodkin reports that a user forum includes six pages of such complains, primarily from European users. Dropbox has become increasingly popular in the workplace, creating a quandary for CIOs who want to provide users with the obvious productivity benefits of Web-based collaboration tools but are concerned with security issues. Last year an error on the site left every account accessible with any password for four hours.

Judge gives Apple order, marketing hook. A U.K. judge has ordered Apple to place advertisements in U.K. newspapers and magazines, and post a notice on its U.K. website, saying Samsung did not copy designs for its iPad, Bloomberg’s Kit Chellel reports. Earlier this month a London court found that the Samsung Galaxy tablet did not infringe on designs registered to Apple, reasoning that Samsung could not have copied Apple because its tablet was “not as cool” as the iPad.

Google launches a Gmail SMS service in three African countries. Owing to a lack of traditional infrastructure in many regions, the continent has been quick to leverage simple mobile technology such as text messaging for everything from banking to payments. ”Perhaps more important,” writes GigaOm’s Kevin C. Tofel, “is the idea of using legacy cellular infrastructure to take the place of high-speed broadband, which may not be available or may be too costly in some areas.”

Investors still see value in flash sales. Venture capitalists — including Skype co-founder Niklas Zennstrom – are pouring money into flash-sale site Fab.com, a sign investors still see potential in the business even as growth rates slow and profits remain elusive, says the WSJ’s Spencer Ante. Some smaller flash-sale sites have closed and bigger ones have laid off workers, leading some observers to see them as a recession-era phenomenon whose time has passed. But survivors are expanding into new markets and bargain-hungry consumers are helping boost their revenue. Fab isn’t profitable yet because it’s investing to expand overseas, but it aims to turn a profit in its U.S. business by next year. In the meantime, it’s value has ballooned. The new investment led by Atomico—a venture firm launched by Zennstrom—values Fab at $600 million — triple what it was worth just seven months ago.

First known photo of iPad shows a little baby fat. The poor quality black and white photos of a chunky, tablet-like device with a large Apple logo are not much to look at, but according to Network World’s Yoni Heisler, they could be the earliest known photos of an Apple iPad prototype. According to Apple design guru Jonathan Ive, the photos date “sometime between 2002 and 2004.”

YoutTube adds blurring tool for faces. YouTube has introduced a new tool allowing editors to blur the faces of people in a video before publishing it to the site. A company blog post described the tool as a way to protect the identity of everyone from political dissidents protesting overseas to the kids watching “your 8-year-old’s basketball game.”

EARNINGS ROUNDUP

IBM raises outlook. IBM boosted its full-year earnings outlook, helping alleviate investor worries about technology spending, even as its revenue fell short of analysts’ forecasts for the fourth consecutive quarter, the WSJ’s Shara Tibken reports. IBM said it now expects 2012 operating earnings of at least $15.10 a share, up 10 cents a share. Overall, IBM reported a profit of $3.88 billion, or $3.34 a share, up from $3.66 billion, or $3 a share, a year earlier. Revenue fell 3.3% to $25.78 billion, which was less than the $26.28 billion projected by analysts. Its revenue is flat so far in 2012, and sales gains for software and in emerging markets overall slowed last quarter.

Ebay profits jump.EBay‘s turnaround efforts continue to pay off. The e-commerce retailer reported a second-quarter profit of $692 million, up from $283 million last year. EBay’s marketplace division posted 9.1% higher revenue thanks in part to the site’s efforts to remove clutter, improve its search engine and promote sales and free shipping offers, reports the WSJ’s Ben Fox Rubin. The company’s payments division posted a 26% increase as its PayPal unit made more inroads into mobile commerce and worked to etablish itself as a payment option for brick and mortar stores.

Microsoft and Google both report Thursday after the market closes.

EVERYTHING ELSE YOU NEED TO KNOW

Green shoots spotted in housing, but nowhere else. The U.S. recovery is experiencing a flip-flop, with housing picking up but other areas—such as consumer spending, manufacturing and hiring—all sagging, the WSJ says. But housing could still weigh on the economy in other ways. With nearly $7 trillion in housing value wiped out from the market’s 2006 peak, more than 11 million Americans owe more than their homes are worth.

On the economic agenda, weekly jobless claims are expected to reverse their recent downward trend and jump up to 365K from last week’s 350K. June existing home sales are seen rising 2% after May’s 1.5% fall. And the July Philadelphia Fed manufacturing survey is expected to narrow to -9 from -16.6 in June.

Big banks are wielding the ax. The six largest financial firms in the country have cut over 18,000 jobs in the past year and there’s more slashing to come, the WSJ reports. Recent profits have been bolstered by the release of cash that was set aside to cover bad loans. But revenue has been soft and lending is still weak. It’s a balancing act, though. In such a competitive business, if banks cut too deeply, they could cede ground to rivals.

EUROPE: WHAT YOU NEED TO KNOW

Greek political leaders have identified two-thirds of the spending cuts demanded by international creditors, but they sounded a warning over rising poverty levels as the country’s five-year recession continues unabated, the FT reports [registration req'd]. And the IMF called for the ECB to ramp up bond buying – warning of “a sizable risk” that some euro zone countries could suffer deflation, the NYT says. No response yet from the ECB.

Comments (2 of 2)

Interesting article. I do agree with your thoughts, and in fact this is why I simply love this cloud technology, It just helps me break from my IT Hassles, its reliable, and its secure. Moreover, its helping organizations to save up to 40% (OPEX and CAPEX) by eliminating the cost of owning traditional PC/Server environments. Also, helps in Increasing energy efficiency by 80% through virtual servers and virtual desktops. Addition to this. cloud computing also eliminates the cost of purchasing, supporting, and upgrading equipment and software. Isn't this so flexible that you pay only for the benefits and applications you need in a low, monthly rate – nothing more.

Doubtlessly, Cloud is Here to Stay!

8:16 am July 19, 2012

Dr Sam Bansal wrote:

Never read any thing on this journal. I like it a lot as I found that it covered a whole lot of things concerning the CIO trade. Expect to be a regular at it in future. Please review my last book " Technology Scorcards- Aligning IT Investments with Business Performance" at Amazon.com or Wiley.com. Sam

The factors that render the electrical grid vulnerable to cyber attack are strikingly similar to the cyber risk issues faced by health care, financial services, and other industries. But one recent malware campaign targeting utilities shows just how exposed the grid remains to cyber threats.